Gujarat High Court
Kiran Corporation - A Proprietary Firm vs State Of Gujarat & 4 on 2 August, 2017
Equivalent citations: AIR 2018 (NOC) 147 (GUJ.)
Author: Akil Kureshi
Bench: Akil Kureshi, Biren Vaishnav
C/SCA/17207/2016 JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL CIVIL APPLICATION NO. 17207 of 2016
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR.JUSTICE AKIL KURESHI
and
HONOURABLE MR.JUSTICE BIREN VAISHNAV
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1 Whether Reporters of Local Papers may be allowed
to see the judgment ?
2 To be referred to the Reporter or not ?
3 Whether their Lordships wish to see the fair copy of
the judgment ?
4 Whether this case involves a substantial question of
law as to the interpretation of the Constitution of
India or any order made thereunder ?
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KIRAN CORPORATION - A PROPRIETARY FIRM....Petitioner(s)
Versus
STATE OF GUJARAT & 4....Respondent(s)
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Appearance:
MR ASHISH H SHAH, ADVOCATE for the Petitioner(s) No. 1
MR.PRANAV TRIVEDI, AGP for the Respondent(s) No. 1 - 2
MR NIRAL R MEHTA, ADVOCATE for the Respondent(s) No. 3
MR SANJAY A MEHTA, ADVOCATE for the Respondent(s) No. 5
NOTICE SERVED BY DS for the Respondent(s) No. 4
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CORAM: HONOURABLE MR.JUSTICE AKIL KURESHI
and
HONOURABLE MR.JUSTICE BIREN VAISHNAV
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C/SCA/17207/2016 JUDGMENT
Date : 02/08/2017
ORAL JUDGMENT
(PER : HONOURABLE MR.JUSTICE AKIL KURESHI)
1. This petition is filed by unsuccessful bidder for a government contract for supply of sports equipments. He has challenged the entire tender process on the ground that the selection of the successful tenderer was vitiated on the grounds of legal and factual mala fides.
2. Brief facts are as under.
3. Petitioner firm is an authorized dealer of sales and maintenance of gym and health equipments. The petitioner has the agency of one Unique Gymnasium and Healthclub Products who are the manufacturers of such equipments. Respondent no.2District Sports Officer, Mehsana had invited online tender for supply and maintenance of gym equipments at Visnagar for the year 201617. As per this notice, last date for submission of tender bids was 01.08.2016. The tenders would be opened on 03.08.2016 and the financial bids would be opened on the same date. The petitioner and seven other agencies applied in response to such tender Page 2 of 13 HC-NIC Page 2 of 13 Created On Sun Aug 13 21:53:47 IST 2017 C/SCA/17207/2016 JUDGMENT notice. At the technical stage, four including the present petitioner, respondent no.3Multi Purpose Manpower Support Services, respondent no.4Aishwarya Sports and one North Gujarat Sports and Scientific qualified. The rest were found technically not qualified. As per the tender inviting agency, all four technically qualified agencies were allowed to make presentation before a specially constituted committee of high level officials. Each committee member had alloted marks under different headings to each agency. As per the predecision, an agency had to secure more than 70% marks to qualify for the next stage of opening the financial bid. In the present case, the marks were alloted out of total of 90 and therefore, the agency in order to qualify, had to secure a minimum of 63 marks. According to the official respondent, only two out of four technically qualified agencies i.e. Aishwarya Sports and Multi Purpose Manpower Support Services secured such qualified marks. Aishwarya Sports secured 70 marks and Multi Purpose Manpower Support Services secured 78 marks out of 90. The petitioner as well as North Gujarat Sports and Scientific secured less than 63 Page 3 of 13 HC-NIC Page 3 of 13 Created On Sun Aug 13 21:53:47 IST 2017 C/SCA/17207/2016 JUDGMENT marks out of 90 and were therefore disqualified at that stage. According to the official respondent, the price bids of the said two agencies Aishwarya Sports and Multi Purpose Manpower Support Services were opened and since the quotation of Multi Purpose Manpower Support Services was lower of two; such agency was selected and ultimately awarded the contract for supply and maintenance of equipments. It is pointed out that the government had hired the respondent no.5(N)Code Solutions for providing the online portal and other technical support.
4. The case of the petitioner however is that after the technical stage where the petitioner and other three agencies qualified, price bids were opened by the authorities before the qualified agencies were allowed to make presentations. According to the petitioner this vitiated the entire selection process since the selecting authority already had access to the price bids of the competitors and this was reflected in the selection making process while the committee was assigning marks for the presentation to the different bidders. Counsel for the petitioner pointed out that the comparative price bids of the Page 4 of 13 HC-NIC Page 4 of 13 Created On Sun Aug 13 21:53:47 IST 2017 C/SCA/17207/2016 JUDGMENT said four agencies is as follows:
Price bid Kiran Corporation petitioner 24,22,953/ North Gujarat Sports fourth bidder 24,69,137/ and Scientific Multi Purpose Manpower respondent no.3 32,26,821/ Support Services Aishwarya Sports respondent no.4 37,69,000/
5. On the basis of such comparison, the counsel pointed out that the price bids of the petitioner and the North Gujarat Sports and Scientific were much lower than the other two bidders viz. Multi Purpose Manpower Support Services and Aishwarya Sports. Authorities, in order to knock down the more competitive bidders, have deliberately given them marks less than the minimum qualifying marks to ensure that they do not qualify.
6. We may make a brief reference to the pleadings on record in the context of this controversy. The authorities have filed multiple replies. Along with the reply dated 15.12.2016 filed by one Ms.Sonal Chavada, District Sports Officer, Mehsana, the authorities have produced the minutes of the tender Page 5 of 13 HC-NIC Page 5 of 13 Created On Sun Aug 13 21:53:47 IST 2017 C/SCA/17207/2016 JUDGMENT committee and the marksheets of each member of the committee before whom the technically qualified tenders had made presentations. These marksheets would show that marks were alloted to the agencies under five different headings viz. i) active plan, ii) project implementation plan, iii) sustainability plan,
iv) supplementation of service of gym and fitness center including infrastructure improvement and; v) product description. These subheadings carried the maximum marks of 2, 2, 3, 3 and 5 respectively. Each member of the committee was thus allotting a maximum 15 marks to each competitor. The marks alloted by the each member of the committee were totaled. Since there were five members in the committee. The total tally of marks to be awarded to each competitor came to 90. Along with the said affidavits, the respondents have also produced the minutes of the proceedings of 03.08.2016. These minutes record that Aishwarya Sports was awarded 70 marks and Multi Purpose Manpower Support Services was awarded 78 marks. The minutes also refer to an earlier decision taken by the tender committee to qualify only those agencies which secured a minimum of 70% i.e. 63 out of 90 marks. The minutes Page 6 of 13 HC-NIC Page 6 of 13 Created On Sun Aug 13 21:53:47 IST 2017 C/SCA/17207/2016 JUDGMENT thereafter referred to the opening of the price bids of the said two qualified agencies Aishwarya Sports and Multi Purpose Manpower Support Services.
7. In light of such controversy, two issues presented before us. One was, at which precise point of time did the tender inviting agency had accessed to the price bids of the tenderers. If the price bids were opened before allowing the technically qualified tenderers to make their presentations, clearly the entire tender process would be vitiated. This is so because as correctly contended by the counsel for the petitioner, the qualification beyond the technical stage was based on the marks to be alloted by the members of the committee on the presentations to be made by the tenderers. This had clearly discretionary elements. If such members and the tender inviting the agency had access to the financial offers of each tenderer, the allocation of marks could easily be motivated. When qualification or disqualification of a tenderer beyond the technical stage is based solely on discretionary allotment of marks by human agency, it is of extreme importance that the tender inviting agency or the members of the committee have no idea Page 7 of 13 HC-NIC Page 7 of 13 Created On Sun Aug 13 21:53:47 IST 2017 C/SCA/17207/2016 JUDGMENT about the relative financial bids of the participants.
8. On the other hand, if we find that the authorities had access to the financial bids of any of the tenderers after the process of presentation and allotment of marks by the committee was over, there is no other fault that would attach to the tender process. Nothing has been pointed out to suggest that the allotment of marks by the committee of five different members was otherwise vitiated on factual malafides.
9. The second issue which caught our attention was the assertion of the petitioner that the price bids of all four technically qualified bidders were in public domain. Counsel for the petitioner pointed out that the petitioner had access to the financial bid of North Gujarat Sports and Scientific also which according to the official respondent, had not traveled beyond the stage of being technically qualified and whose financial bids were never opened because the committee had alloted less than 70% marks to the said agency.
10. In this context, we have several affidavits on Page 8 of 13 HC-NIC Page 8 of 13 Created On Sun Aug 13 21:53:47 IST 2017 C/SCA/17207/2016 JUDGMENT record including that of respondent no.5(N)Code Solutions dated 31.07.2017. Our utmost anxiety was to ascertain whether the financial bids of any of the tenderers was available to the government authorities before making of the presentations and in what manner did the petitioner have access to the financial bid of North Gujarat Sports and Scientific though North Gujarat Sports and Scientific was disqualified. In this context, we find that in additional affidavit in reply dated 04.07.2017 filed by one Shri Naresh Chaudhary on behalf of respondent no.2, it was stated that on perusal of the time log, it can be seen that decryption was done at 17:32 on 03.08.2016. It was further stated that without such decryption, the financial bids cannot be opened by respondent no.2 and before decryption, the later bids of the petitioner and North Gujarat Sports and Scientific were canceled.
11. This statement in the affidavit created multiple complications. The official respondents have produced the detailed log of the activity on the webportal during the relevant period. From such log, an attempt was made to suggest that first the stage of verification of technical qualifications was cleared, Page 9 of 13 HC-NIC Page 9 of 13 Created On Sun Aug 13 21:53:47 IST 2017 C/SCA/17207/2016 JUDGMENT at which stage, four out of eight tenderers were disqualified. Four technically qualified tenderers were allowed to make presentations before the committee who alloted them marks. Since two agencies i.e. Aishwarya Sports and Multi Purpose Manpower Support Services received minimum qualifying marks, their bids were considered further and the other two agencies i.e. the petitioner and the North Gujarat Sports and Scientific having received less than qualifying marks, did not go to the next stage. From the logs, it was further sought to be canvassed before us that the price bids of only two qualified agencies were opened, decryption for which took place at 17:32 and the price bids were compared at 17:40 on 03.08.2016. Since the statement in the entire affidavit dated 04.07.2017 that decryption took place at 17:32 created confusion, we had minutely examined the materials on record and we are convinced that such statement was made due to oversight and inadvertently and does not reflect the correct position.
12. The log sheet would show that at 14:25, four out of the eight bidders were disqualified at technical stage and this was confirmed at 14:28. Thereafter, Page 10 of 13 HC-NIC Page 10 of 13 Created On Sun Aug 13 21:53:47 IST 2017 C/SCA/17207/2016 JUDGMENT the authorities entered the bid evaluating stage at 14:29 by, as was explained by respondent no.5(N)Code Solutions, logging into the portal. This by itself however would not suggest that the financial bids were opened at that time. Once again at 15:10, the reference to bid evaluating stage is referred to as "user" opened the stage (commercial stage). At 17:30 again, the stage was referred to as selected stage supplier BOQ i.e. bill of quantities. At that stage, Aishwarya Sports and Multi Purpose Manpower Support Services were shortlisted. The other two agencies i.e. the petitioner and North Gujarat Sports and Scientific were canceled. The decryption took thereafter only at 17:32 and at 17:40 the stage came for viewing the comparison.
13. From the above log movement, it can be seen that after the bid evaluating stage at 15:10, there is little further significant movement till 17:30 i.e. over an hour and a half later. It is in between this period that according to the official respondent, the actual presentation and allotment of marks by the committee took place. At any rate, the decryption for opening the price bids took place at 17:32, by which Page 11 of 13 HC-NIC Page 11 of 13 Created On Sun Aug 13 21:53:47 IST 2017 C/SCA/17207/2016 JUDGMENT time, the petitioner and North Gujarat Sports and Scientific were disqualified, as stated by the respondents on the basis of the marks alloted by the committee. It is thus clear that the pricebids of none of the tenderers were opened before completion of the presentation process. This has also been supported by the affidavit of respondent no.5 which is the agency providing the technical support and which otherwise has no other involvement. We have no data to go by, to hold that despite such log movement, the price bids were available to the government agency even before disqualification of petitioner and North Gujarat Sports and Scientific through selection process.
14. The second issue however, remains. In this context, we had tried to gather correct picture from the counsel from respondent no.5 who under instructions explained that since four agencies were allowed to cross the technical stage, after the decryption was done by the government agencies, each bidder could view the price bid of the other. For multiple reasons, we do not find this to be an ideal situation. Once the bidder is disqualified at a Page 12 of 13 HC-NIC Page 12 of 13 Created On Sun Aug 13 21:53:47 IST 2017 C/SCA/17207/2016 JUDGMENT particular stage before the price bids are opened, we wonder why his offer should be open to access to his competitors. Secondly, the precise movement on the website may be recordable but not that of the interview committee's. It would, therefore be far more desirable that at least in future, the price bids of unqualified agencies may not be in public domain. This would be between the government and its technical support agencies to sort out. So far as presentation is concerned, however, we do not find any basis to uphold the allegations of factual malafides.
15. In the result, petition is dismissed.
(AKIL KURESHI, J.) (BIREN VAISHNAV, J.) ANKIT Page 13 of 13 HC-NIC Page 13 of 13 Created On Sun Aug 13 21:53:47 IST 2017